The Australian developer who was supposed to buy Saddleback Mountain has been arrested for fraud after allegedly misusing $5 million from a Chinese investor.

Sebastian Monsour, CEO of the Majella Group, was arrested Thursday afternoon following a raid of his office in Brisbane, Australia. Police in Queensland said during a press conference that the arrest followed a “long and protracted investigation” into allegations by a Chinese investor that Monsour did not invest the $5 million as he was supposed to.

Police are still trying to determine how the money was used and said it will likely not be recovered. During the raid, police seized financial records and electronic evidence.

The Chinese investor, who now lives in Australia, filed a lawsuit in December accusing Monsour of deceit and taking advantage of an Australian visa program.

Saddleback closed almost four years ago, when owners Bill and Irene Berry did not get $3 million they needed for a new chairlift. The resort sat idle for three straight seasons as the owners searched for a buyer.

In June, Monsour announced that he was buying Saddleback to make it the premier ski resort in North America. The sale has yet to be completed. Monsour was quoted as saying that the reason he was buying the ski resort was for the U.S. EB-5 visa program, in which entrepreneurs, their spouses and unmarried children under 21 are eligible to apply for green cards if they meet certain criteria. The EB-5 program provides foreign investors with an expedited process to secure visas to live and work in the United States if they give at least $500,000 to a qualified project.

Monsour later said his comments in the recording were part of a larger discussion on financial models and were taken out of context in media reports. He said much has happened in putting together a business plan to purchase and redevelop the resort since then.

Monsour is being held without bail, Australian police said.

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